Morrison warns Montanans to check their mail for privacy notices Differences in state and federal privacy laws are significant

After July 1, financial companies, including banks, securities firms and insurance companies, will share and trade personal information about their customers, unless the customer has said, "no," according to the Gramm-Leach-Bliley Act passed by Congress.

Amendments to Montana's Insurance Information and Privacy Protection Act prevent the state's insurance consumers from having to tell their insurance company not to share the personal information they collect, except in ways allowed by law.

"The fact that Montanans' personal information is protected when held by insurance companies shouldn't give consumers a false sense of security that it is protected when held by all types of financial companies," said John Morrison, Montana's State Auditor and Insurance Commissioner. "Information held by other financial companies is not protected in the same way."

The privacy notices consumers are receiving from their financial companies may be some of the most important mail inserts they will ever receive, Morrison said.

The new federal law requires companies to develop a privacy policy and inform customers that the company holds their personal information. Consumers can "opt out" of having their personal information shared, but it requires consumers to tell the company "no."

"In some cases, doing nothing when you get these notices means that you have given companies permission to share, sell or market your personal information," Morrison said. "Reading the small print or calling a toll-free number can take some time, but if you don't want your personal information shared without your permission, you have to tell the company."

By opting out, customers keep their personal information from being shared, traded or sold with unaffiliated companies. If Montanans decide they want to opt out after the July 1 deadline, they can contact the company at any time. Then once a year, companies must notify consumers about their privacy rights policy and give them the option of refusing to have their information shared. If a Montanan opens a new bank account or takes out a new credit card, then the company also must provide the privacy notice.

The good news is that insurance companies will not release the personal information of Montanans, except under limited circumstances, without a consumer's permission, thanks to a bill brought by Morrison and passed by the 2001 Legislature.

Montanans will get a separate notice from insurance companies when their policy is issued or renewed, or on an annual basis. Companies that provide insurance in Montana are restricted to how they use a person's personal information. Consumers don't have to opt out. The law already does that for them.

Montana law prohibits insurers from treating policyholders adversely - by denying or canceling coverage or increasing premiums - just because a consumer declines to waive his or her privacy rights. It also sets the maximum penalty for violating a consumer's privacy rights at $25,000.

"Even though Montana has a separate law that provides more protection for insurance consumers, the safest course of action is to opt out at every opportunity to protect your personal information," Morrison said.